Free Zone Entity
Is your business in a UAE free zone?
Taxable Income
AED 400,000
Corporate Tax
AED 2,250
Effective Rate
0.6%
Net Profit
AED 397,750
Mainland Entity
Standard corporate tax rate of 9% applies above AED 375,000.
Eligible for Small Business Relief
Revenue of AED 1,000,000 is under the AED 3,000,000 threshold.
Understanding UAE Corporate Tax
When did UAE corporate tax start?
UAE Corporate Tax came into effect on 1 June 2023 for financial years starting on or after that date. The tax is levied at 9% on taxable income exceeding AED 375,000. Income below this threshold is taxed at 0%. This was a landmark change for the UAE, which previously had no federal corporate tax for most businesses.
What is the corporate tax threshold?
The corporate tax threshold is AED 375,000. Taxable income up to this amount is subject to 0% tax. Only the portion of taxable income exceeding AED 375,000 is taxed at 9%. Additionally, businesses with revenue up to AED 3,000,000 may qualify for Small Business Relief, which can elect to be treated as having no taxable income for the relevant period.
Are free zone companies exempt from corporate tax?
Qualifying Free Zone Persons can benefit from a 0% corporate tax rate on their qualifying income. To qualify, a free zone entity must maintain adequate substance in the UAE, derive qualifying income (such as transactions with other free zone persons or certain foreign-sourced income), comply with transfer pricing rules, and not elect to be subject to the standard tax rate. Non-qualifying income earned by free zone entities is subject to the standard 9% rate.
Ministry of Finance-Aligned: This calculator uses official UAE corporate tax rates effective from June 2023. Consult a qualified tax adviser for complex corporate tax situations.
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Disclaimer: This calculator provides estimates based on current UAE Federal Tax Authority rates and MOHRE labour law provisions. It does not constitute professional tax, financial, or legal advice. Your actual entitlements may differ depending on your individual circumstances, employment contract, and applicable free zone regulations. Always consult a qualified adviser before making financial decisions. Read our terms